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Jul 18, 2011 1:18 PMPublication: The Southampton Press

Southampton Town Will Need To Come Up With Millions To Meet Tax Cap Next Year

Jul 20, 2011 9:41 AM

The clock is ticking as Southampton Town leaders try to come up with a plan to shave millions of dollars in spending to meet a New York State property tax cap that goes into effect next year.

In what town officials are labeling one of the bleakest budgeting seasons in recent memory, they say they will be slashing somewhere between $4 million and $5 million in spending to come up with a 2012 budget markedly below this year’s $79.9 million spending plan. Next year’s budget needs to be approved by November 17.

“So what does that mean?” Town Supervisor Anna Throne-Holst asked during a press conference in her Town Hall office on Tuesday morning. “That means some very hard decisions.”

Town officials have just begun to roll up their sleeves and get to work in surveying what needs to be done to come into compliance with Governor Andrew Cuomo’s tax cap, which was approved last month by the State Legislature. The new law prohibits municipalities across the state from increasing their tax levy—the overall amount collected in property taxes—by more than 2-percent or the rate of inflation, whichever is lower.

Town Comptroller Tamara Wright disclosed dire projections of cuts that will be required to meet the cap during a presentation at Friday’s Town Board work session, at which New York State Assemblyman Fred W. Thiele Jr. also explained some of the specifics of the cap’s requirements.

The state law does allow municipalities to pierce the cap with a vote of 60 percent of a governing board, Mr. Thiele noted. In Southampton Town’s case, that’s a simple majority—three out of five Town Board members. But on Tuesday morning, Ms. Throne-Holst said she would not be in favor of piercing the cap.

Productive conversations with the town’s labor unions, reorganization of town departments and potential consolidations are all strategies that are being considered in an effort to meet the cap, Ms. Throne-Holst explained. Discussions with the town’s Civil Service Employees Association and the Patrolmen’s Benevolent Association are being scheduled in the coming days, she said.

Ms. Wright noted that since 2008, the town has lost 70 positions, either through retirements or attrition. Ms. Throne-Holst said she wants to avoid layoffs. “We’ll get through this,” she said.

In a new effort to bring the public into the budgeting process, Ms. Throne-Holst will be holding three public forums before releasing her tentative 2012 budget in September to get a feel for what services town residents value, and at what dollar price. The forums will begin in the second week of September and will take place at the town’s community centers in Flanders, Hampton Bays and Bridgehampton. “To my knowledge that’s never been done before, but it’s a time for us to value that discourse,” she said.

At Friday’s work session, Mr. Thiele noted that there are a couple of exceptions to the tax cap. Revenues the town receives from new construction—for example, taxes generated by a new housing subdivision or a commercial enterprise—are exempt from the cap and can be counted as part of the town’s tax base. Also, if the town does not raise its tax levy the full 2 percent in a given year, it is allowed to use the remaining percentage to count towards the following year’s levy, up to 1.5 percent. For example, if a town only increased its tax levy by 1 percent, it could increase the levy the following year by 3 percent. But that only applies for the following year, he said. “You have to use it or lose it the next year,” Mr. Thiele said.

That prompted the question by Ms. Wright on whether the town would be permitted to increase its 2012 tax levy by an additional 1.3 percent, since in 2011, the municipality only raised its levy by 0.67 percent, to nearly $60 million. Mr. Thiele said he’s still waiting for a ruling from New York State Comptroller Thomas P. DiNapoli on the matter.

Under the cap, the town would only be allowed to increase its tax levy by about $1.1 million. But mandatory contractual increases to the town’s 2012 budget far exceed the increase, Ms. Wright said on Friday. “Based upon my best estimate at the moment, we’re somewhere between $2.8 million and $4 million outside the cap,” she said. To meet just the mandatory, contractual costs, the board will need to come up with somewhere between $3.9 million and about $5 million next year, according to Ms. Wright’s estimates.

Officials from other East End municipalities also have the tax cap in mind. Villages like Southampton and Westhampton Beach have not seriously begun discussions about the cap yet, officials noted, but plan to do so in the near future. Southampton Village Administrator Stephen Funsch noted that villages operate on a different fiscal schedule than towns, so discussions about the budget will not begin until January. Westhampton Beach Mayor Conrad Teller said the Village Board has scheduled a presentation by Mr. Thiele on the tax cap at a meeting next month.

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Expect a detached, sort of vacant look in her eyes and a mumbling, monotone speech pattern. Also look for body language that says "i would rather be anywhere than here right now.". Don't doubt me on this.
By HSA (68), southampton on Jul 18, 11 2:24 PM
2 members liked this comment
Looks like there will be serious renegotiations necessary to come into compliance with the new law. Is this a board event or a campaign event? One would expect other town board members to be present as well.
By Toma Noku (616), uptown on Jul 18, 11 2:49 PM
1 member liked this comment
While finding economies on this scale would be difficult for most municipalities, Southampton Town is fortunate(?) in having a large cadre of employees who are paid at least $$150K/yr. (in one case, $$235K/yr) and who are working years beyond the date on which the Town Code requires their retirement. Simply enforcing that provision of the code will free up most of the needed funds.

I refer, of course, to the STPD. It is years past time for Ms. Throne-Holst to shed the mantle of PBA Patroness ...more
By highhatsize (4217), East Quogue on Jul 18, 11 4:32 PM
Wishfull thinking HH!
By GoldenBoy (351), EastEnd on Jul 18, 11 4:37 PM
1 member liked this comment
No cuts for STPD we need everyone of those officers-cut elsewhere.
By EastEnd68 (888), Westhampton on Jul 18, 11 5:01 PM
Take heart SH Town, municipal bankruptcies will skyrocket over the next few years/decades, so most obligations will be wiped off the books IMO.

The bad news?

Pension plans including health care will be wiped out.

We may have only seen the tip of the iceberg of the "Financial Crisis" over the last few years.
By PBR (4956), Southampton on Jul 18, 11 5:32 PM
1 member liked this comment
Things are going to get very interesting around Town Hall. Too bad it took State legislation to do what local government should have been doing for the last decade or more. It's a sad commentary on the performance of your local officials.
By Doug Penny (64), Lexington, Virginia on Jul 18, 11 5:57 PM
The Town leaders have been shortchanging the citizens for years, and most people are to busy paying bills and raising families to notice. I've NEVER seen a projection of future revenues and expenses published that details the fixed obligations that town is incurring now for future pension and other retirement obligations. My understanding is that the police can retire at relatively young ages at 50% of full pay with health benefits for life. They can then go on to second careers. Time to bring ...more
By Funbeer (273), Southampton on Jul 18, 11 6:24 PM
3 members liked this comment
Time to focus on healthcare and pension costs for all town employees rather than decreasing services to those that foot the bill .
By auntof9 (159), Southampton on Jul 18, 11 6:32 PM
2 members liked this comment
To my understanding, most of the benefits which SH Town is obligated to pay in the future (retirement, health, disability, you name it, . . . .) are written in stone from a contractual obligation perspective.

It is probably not possible to renegotiate these legacy contractual obligations, except in Bankruptcy Court.

As in many village, town and other municipal governments, long-term advance planning and projections of these legacy retirement costs never was put clearly on the table. ...more
By PBR (4956), Southampton on Jul 18, 11 6:51 PM
3 members liked this comment
For better or worse, the pensions of existing municipal employees are guaranteed by the state constitution, and the town cannot declare bankruptcy without the express authorization of the state, which would be unlikely in lieu of the state imposing the cap. Layoffs, and the threat of layoffs, will force the unions, including the police, to agree to large-scale concessions, esp. for new employees. But thats been the plan all along.
By zaz (197), East Hampton on Jul 18, 11 8:05 PM
1 member liked this comment
Really, try being a contractor in Southampton Town, cut the fat Land Management Department and the Electrical Department. The rest of the townships have private electrical inspection agencies that do a great job and don't cost the tax payers any money unless they need them. Soutahmpton Town has inspectors for everything. Look around in other Townships. Their not having the problems that Southampton are having. The media needs to start doing their homework if our politicians aren't.
By Yearround Resident (23), Southampton on Jul 18, 11 10:20 PM
Please do not doubt me on this: Every single penny of this shortfall can be made up in the health insurance benefit alone. Easily. The budget for SH Town's Health Insurance is over $6,000,000. The folks who possess insurance through the Town have the NYSHIP plan. This is the Cadillac of all Cadillac plans. You pay for it. While you have to decrease your benefits, the Town renews "as-is" year after year. The rates on that plan are almost $600.00 for a single person and BLOWS your plan out ...more
By HSA (68), southampton on Jul 19, 11 6:33 AM
3 members liked this comment
HSA: Many things, some undisclosed and utterly insane, have to be touched. For example, Town employees, including the Police, only have to work for the Town for 10 years and they become vested with LIFETIME HEALTH BENEFITS.

Not even the best corporate employee benefits in America such as cash cows Google and Microsoft would dare offer such an irresponsible program, especially when health benefit costs are escalating at 17-25% per year.

What's going on? The Southampton Town bureaucracy ...more
By Obbservant (449), southampton on Jul 24, 11 12:12 AM
1 member liked this comment
The municple pay package has to change. Being able to accrue unused sick, personal and vacation days, then cashing them out in the end is just a crime. Use your time each calender year or lose it. No pay for it on the cash out as the salary should be enough. Retiring at an early age with larger pension payouts allows another job and another municple pension. Its like double dipping. Time for the workers to pay for their health insurance like the rest of us. The budget is tight mainly do to this ...more
By North Sea Citizen (568), North Sea on Jul 19, 11 6:45 AM
3 members liked this comment
Great reply NS Citizen! When the time comes for conract renewals for all Town employees there should be no health insurance offered. Pay for your own the same way any small businessman has to do.
By bigfresh (4666), north sea on Jul 19, 11 7:00 AM
1 member liked this comment
bigfresh, your solution to everything is a big eff u to working people. You and your fellow baggers are hell-bent on destroying the US economy. Thank god you'll be nothing more than a bad memory in 2012,
By razza5351 (551), East Hampton on Jul 19, 11 11:09 AM
1 member liked this comment
The only "working people" you give a rats ass about are the ones making $100,000+ working for the government and the union thugs who campaign for leftists.

You don't care about all the tradesmen who lost their livelihoods to your precious illegal immigrants.

You don't care about the small businesses, who CREATE the majority of jobs, crushed by ever increasing tax and regulatory burdens to feed your beloved welfare state.

You don't care about the tens of thousands of jobs ...more
By RealityFirst (597), Bridgehampton on Jul 19, 11 11:40 AM
Ah, bigfresh's alter ego. What's I find most surprising is that people with multiple personality disorders usually have at least one that is sane.
By razza5351 (551), East Hampton on Jul 19, 11 11:44 AM
Wow, you just can't stick to anything substantive, can you?

Like a good liberal every debate decends into name calling, ad hominem attacks, and emotional diatribes.

How answering one point? Just one:

What do you say to all the carpenters, roofers, and masons who can't provide for thier families any more because they've been undercut by illegal immigrants working under the table?
By RealityFirst (597), Bridgehampton on Jul 19, 11 11:49 AM
1 member liked this comment
"How answering" should have been "How about"
By RealityFirst (597), Bridgehampton on Jul 19, 11 11:50 AM
Track down the people undercutting you, and find a way to deport them, if they truly are illegal. Take down license plates, VIN numbers, send a report every week to the people who are supposed to be responsible for expunging them from our society. VIN and plate don't match state records? Things that make you go "Hmmmmm...". You, and the rest of us pay them to do said job, after all.

What else I would say to them, is to discover, learn about, and protest the reasons such disparity has ...more
By Mr. Z (11847), North Sea on Jul 19, 11 5:18 PM
The 2 percent tax cap legislation includes numerous exemptions and most importantly (albeit political quick sandish) the ability to pierce the cap with a 60 percent vote of the Town Board. The very same 3 votes it takes to pass any legislation in the Town. So while the cap serves as a wake-up call to elected officials it is not in and of itself an executioner. The political ramifications of voting to pierce the cap, should that be the route followed will fall only about the one council member ...more
By NTiger (543), Southampton on Jul 19, 11 10:11 AM
1 member liked this comment
The same problems have been in the news in Florida recently and the counties have,become self insured and started there own health clinics for all employees This capped health costs and was a huge savings. It was a way to get a handle on the very high cost of health insurance.
By K2040 (8), Southampton on Jul 19, 11 10:38 AM
1 member liked this comment
I like this self-insurance and clinic concept to the extent that it operates in a manner that would minimize potential fraud and abusive fees. Additionally these schemes should be opened up to local residents and taxpayers as well. It might make sense financially to open these up to greater participation. After all it is the taxpayer that would be paying for these so it makes sense that they also benefit from thme.
By Toma Noku (616), uptown on Jul 19, 11 12:51 PM
1 member liked this comment
Well, with many "private sector" jobs, some of which require BACKBREAKING work, being not only devalued, but fiscally disrespected, and "public sector" employees voting, or "negotiating" higher salaries, perks, entitlements. pensions, and the like on the taxpayer's dime, go figure there would be some type of backlash...
Jul 19, 11 4:31 PM appended by Mr. Z
http://www.salon.com/news/david_sirota/2011/07/13/great_recession_elitism_slideshow/slideshow.html?slide=4
By Mr. Z (11847), North Sea on Jul 19, 11 4:31 PM
UMMM Razzzz, what are you blathering about? We employ the town workers and we can't afford the pay/ benefit package they now enjoy. Let them pay their own health premiums like the majority of small business people do. We the taxpayers are not an ATM that can be hit up whenever the government needs more cash. Make due with the monies that the Town has and make cuts to achieve a balanced budget.
By bigfresh (4666), north sea on Jul 19, 11 8:04 PM
2 members liked this comment
Nice try by the hacks to make the discussion about income. The problem isn't with income, it is with outflow! Spending! Keep your eye on the donut not the hole!
By HSA (68), southampton on Jul 20, 11 8:22 AM
Compromise is needed, otherwise nobody agrees. Make ALL present Town employees pay 50% of their health insurance, and wipe-out acrued sick-leave and vacation pay starting next year. All new hirings in Town get a fiscally responsible contract re: pay, retirement and other bloated benefits. And taxes will go up but with a cap which is fair. COMPROMISE
By Non-Political (125), Hampton Bays on Jul 24, 11 8:08 AM
1 member liked this comment
That is not compromise, that is paying for lousy tax policy on the backs of workers in the middle of a jobless crisis
By razza5351 (551), East Hampton on Jul 24, 11 10:47 AM
Dear god, why are we even considering diluting the benefits of Town workers before we have purged the Town rolls of cops who should have retired years ago?

Let's put everything on the table, by all means, but at the top of the pile of the things on the table, let's put the postponed-by-patronage retirement of old cops. These guys should be sitting on the beach (in St. Kitts, if they have invested wisely), enjoying the same health care benefits that other posters are complaining about for ...more
By highhatsize (4217), East Quogue on Jul 24, 11 3:59 PM
2 members liked this comment
Let's not touch the police dept-we need those experienced officers to stay. ATH has to remember who supported her and the promises she made.
By EastEnd68 (888), Westhampton on Jul 25, 11 5:11 PM